Marginal Abatement Costs and Marginal Welfare Costs for Greenhouse Gas Emissions Reductions: Results from the EPPA Model

Marginal abatement cost (MAC) curves, relationships between tonnes of emissions abated and the CO₂ (or greenhouse gas (GHG)) price, have been widely used as pedagogic devices to illustrate simple economic concepts such as the benefits of emissions trading. They have also been used to produce reduced-form models to examine situations where solving the more complex model underlying the MAC is difficult. Some important issues arise in such applications: (1) Are MAC relationships independent of what happens in other regions?, (2) are MACs stable through time regardless of what policies have been implemented in the past?, and (3) can one approximate welfare costs from MACs? This paper explores the basic characteristics of MAC and marginal welfare cost (MWC) curves, deriving them using the MIT Emissions Prediction and Policy Analysis model. We find that, depending on the method used to construct them, MACs are affected by policies abroad. They are also dependent on policies in place in the past and depend on whether they are CO₂-only or include all GHGs. Further, we find that MACs are, in general, not closely related to MWCs and therefore should not be used to derive estimates of welfare change. We also show that, as commonly constructed, MACs may be unreliable in replicating results of the parent model when used to simulate GHG policies. This is especially true if the policy simulations differ from the conditions under which the MACs were simulated.     

Permits and effluent charges in the water pollution control policies of France,West Germany,and the Netherlands

In this article the water pollution control policies of these countries and their effects on emitters are analyzed. In the Netherlands, local water control boards levy pollution charges on both direct and indirect emitters. The charges are based upon measured emissions and actual treatment costs and they vary among the boards. Discharges into surface waters are by permission only. West German law sets nationally uniform rates only for direct emitters and some pollutants, irrespective of treatment costs. The States (Länder), however, may make indirect emitters liable to pay as well. In France, river basin agencies charge emitters and grant discounts where abatement facilities have been installed. Further policy instruments are tax cuts, subsidies, and standards set on local and national levels. France, in this complex policy, also uses contrats de branche where government and industries agree by contract on pollution abatement. Evidence shows that all these policies have reduced water pollution. As emissions decrease, problems of overcapacity might occur where collective water treatment plants have been installed already. Moreover, investment in additive abatement technology may inhibit the introduction of low-waste, integrated technologies. Yet the development of the latter, though expensive in the short run, should enable industry to meet more stringent standards in the future.     

Meta-Modeling to Assess the Possible Future of Paris Agreement

In the meta-modeling approach, one builds a numerically tractable dynamic optimization or game model in which the parameters are identified through statistical emulation of a detailed large scale numerical simulation model. In this paper, we show how this approach can be used to assess the economic impacts of possible climate policies compatible with the Paris Agreement. One indicates why it is appropriate to assume that an international carbon market, with emission rights given to different groups of countries will exist. One discusses the approach to evaluate correctly abatement costs and welfare losses incurred by different groups of countries when implementing climate policies. Finally, using a recently proposed meta-model of game with a coupled constraint on a cumulative CO₂ emissions budget, we assess several new scenarios for possible fair burden sharing in climate policies compatible with the Paris Agreement.     

Effect of national-level spatial distribution of cities on national transport CO2 emissions

Most research regarding the relationship between cities and transportation carbon emission is focused on intra-city travel, and it has been found that compact patterns tend to emit less carbon. Yet, little is known about the impact of national-level spatial distribution of cities and inter-city transportation on transportation CO₂ emissions. Further, most studies regarding the impact of urbanization on CO₂ emission directly examine the relationship between urbanization rate and CO₂ emission with little consideration of the national spatial pattern of urbanization. This study hypothesizes that the national-level spatial distribution of cities – in a dispersed or polarized pattern – affects national transport CO₂ emissions due to the varying intensity of inter-city transportation. This study uses the Gridded Population of the World v3 and v4 from Socioeconomic Data and Applications Center (SEDAC) of NASA to examine the national-level spatial distribution of urban agglomerations. It applies the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model. The analysis shows that, among 60–90% of urbanized countries, spatially dispersed urbanized countries (e.g., countries with many medium-sized cities scattered over the territory) show a lower national transportation CO₂ emission than spatially polarized urbanized countries (e.g., there are only a few large cities). The urban system elasticity of transportation CO₂ emissions is 0.4 or 0.6. That is, if the degree of polarization decreases by 1%, national transportation CO₂ emissions decrease by approximately 0.4–0.6%. This effect is similar to the effect of GDP per capita of around 0.5%. Because it is particularly difficult to disperse people and economic activities across a country once spatial polarization is set, this study's findings have the most significant implications for urbanizing countries. If urbanizing countries adopt national urban policy and territorial plans to form dispersed cities, it could reduce transportation carbon emissions and promote sustainable development. For already urbanized countries, national urban policy development is recommended to promote spatially dispersed rather than polarized national urban systems.     

Impacts of Decentralized Power Generation on Distribution Networks: a Statistical Typology of European Countries

The development of decentralized sources of power out of renewable sources of energies has been triggering far-reaching consequences for Distribution System Operators over the past decade in Europe. Our paper benchmarks across 23 European countries the impact of the development of renewables on the physical characteristics of power distribution networks and on their investments. It builds on a large spectrum of databases of quantitative indicators about the dynamics of installed capacity of renewable energy resources and the power generation out of them, electricity independence, quality of electricity distribution, smart grids investments, Network System Operators capital expenditures, length of the distribution networks, overall costs of power networks paid by private agents, and electricity losses, all in relation with the development of decentralized generation. The heterogeneity of these indicators across Europe appears to be wide notably because of physical constraints, historic legacies, or policy and regulatory choices. A cluster analysis allows for deriving six groups of countries that display statistically homogenous characteristics. Our results may provide decision makers and regulators with a tool helping them to concentrate on the main issues specific to their countries as compared to the European median, and to look for possible solutions in the experience of other clusters which are shown to perform better for some indicators.     

Assessing the impact of environmental regulation on pollution abatement and collaborative emissions reduction: Micro-evidence from Chinese industrial enterprises

Given the rapid industrialization and urbanization of China, environmental problems have gradually become major constraints that hinder its sustainable economic development. Moreover, China's pollution abatement and reduction of greenhouse gas emissions have been severely affected by pressures coming from domestic environmental appeals and international environmental diplomacy. By using integrated data from the Chinese Industrial Enterprise and the Chinese Enterprise Environmental Survey and Reporting databases, this study constructs comprehensive indicators of pollutant discharge intensity and carbon emissions index at the enterprise level and uses the panel fixed effect model, Kaya identity, and mediation effect model to assess the effects of environmental regulations on pollution abatement and collaborative emissions reduction from the micro-perspective. Results show that these regulations can abate the pollution emissions of Chinese industrial enterprises and verify the effectiveness of environmental policies. These regulations can also efficiently reduce the carbon dioxide emissions of enterprises through pollution abatement. In other words, environmental regulations facilitate a collaborative emissions reduction of pollutant and greenhouse gas emissions from enterprises. Such collaborative emissions reduction effect is also influenced by the energy structure and consumption of enterprises. This paper presents empirical evidence and policy basis for further improving China's environmental regulation policy system and achieving coordinated progress in China's economic development and environmental governance.     

Evaluating the Efficiency of a Uniform N-Input Tax under Different Policy Scenarios at Different Scales

Nitrate pollution from agriculture is an important environmental externality, caused by the excessive use of fertilizers. The internalization of this problem, via a tax on mineral nitrogen, could lead to a second best solution, reducing nitrate emissions. Several authors suggest that a reduction in agricultural support could produce similar results. In this paper, we examine the effects of different levels of a uniformly implemented nitrogen tax in France under two policy scenarios, corresponding to post Agenda 2000 and 2003 Luxembourg reforms of European Union’s Common Agricultural Policy, in order to reveal the synergies and conflicts between the tax and the policy scenarios in terms of nitrate emissions abatement. The analysis is performed at different geographical scales, from the national to the regional and is based on a bioeconomic approach that involves the coupling of the economic model AROPAj with the crop model STICS. Results show that the efficiency of the N-tax varies according to the geographical scale of the analysis and the type of farming. Furthermore, we prove that a uniform implementation may lead to perverse effects that should always be taken into account when introducing second-best instruments.     

Understanding the sustainable consumption of energy resources in global industrial sector: Evidences from 114 countries

The rapid development of industry, which is an energy-intensive sector, may lead to an increased amount of energy consumption. Energy consumption decoupled from economic growth is one of the statuses towards sustainable development. This study conducted a decoupling analysis between industrial energy consumption (IEC) and industrial economic growth (IEG) to identify their relationship. It was found that among the 114 studied countries, there were 32 countries where strong decoupling occurred during the period of 2000 to 2017, while that of others were yet to come. Further, the key factors influencing the IEC of each country are identified based on the factor-related changes over the 17 years. For the 114 countries, the improvement of industrial energy output (IEO) was the most significant driver for IEC, and population also played its role in IEC increment; the reduction of industrial energy intensity (IEI) was the primary inhibitor for IEC, and the decrease of industrial employment rate slightly turned the IEC down over the period. For promoting the decoupling and less energy consumption in the industry, it is suggested to improve the energy efficiency, decelerate the industrial development, or shift the more energy-intensive industrial sectors to less energy-intensive ones, such as services. The study provides a global perspective for IEC reduction with the evidences of 114 countries, and its findings and policy implications provide the status quo and way forward for the countries aiming at reducing their IEC.     

The environmental Kuznets curve of CO2 emissions in the manufacturing and construction industries: A global empirical analysis

The manufacturing and construction industries have significantly contributed to the increase of carbon dioxide (CO₂) emissions. Environmental Kuznets curve (EKC) hypothesis is widely leveraged to analyze the peak of CO₂ emissions, which is considered as a pivotal step for the effective CO₂ emission reduction in previous studies. This study tests the EKC hypothesis using the data of CO₂ emissions of manufacturing and construction industries from 121 countries throughout 1960–2014, and turning points (TPs) are calculated for the countries where EKC hypothesis is validated. The results show that the EKC hypothesis was validated by 95 out of 121 countries, among which, 13 countries have not reached any of the three TPs, 11 countries have reached the first-step TP (TP_CI), 21 countries have reached the second-step TP (TP_PC), and 50 countries have reached the third-step TP (TP_TC). Moreover, the result of examination of the EKC existence at four income levels indicates the higher-income nations own a higher proportion of countries validates the EKC hypothesis and reach the TP. These findings help policy-makers analyze the TP status quo and generate step-wise strategies for national CO₂ emission reduction of manufacturing and construction industries.     

碳中和实践进展、实现路径与展望

概述了国内外在碳中和实践与实现路径方面的研究进展,包括能源路径、技术路径、社会路径和政策经济路径。在此基础上,提出了应用实证数据和模型模拟开展碳中和定量评估、通过不同国家碳中和目标的比较和分析来评估全球碳中和能力和成本、加强不同碳中和路径与产业之间的相关性及多路径共同效应研究等建议。     

Biofuel use assessments in Africa: Implications for greenhouse gas emissions and mitigation strategies

The energy balances of most African countries suggest that biofuels (woodfuel, crop and wood residues, and dung) constitute the largest share of total energy consumption (up to 97% in some sub-Saharan Africa countries). There is, however, an increasing scarcity of woodfuel (fuelwood and charcoal), the major biofuel, and a feared increase in greenhouse gas (GHG) emissions associated with biofuel combustion. The extent of GHG emissions is estimated from biofuel consumption levels that are in turn based on methodologies that might be inaccurate. A questionnaire, supplemented by informal interviews, are used to collect data, yielding information regarding end-uses, technologies used, scale of consumption, determinants of fuel consumption, and interfuel substitution (among other parameters). The survey revealed that cooking is the major end-use, with other common uses, such as space and water heating. Improved stoves that provide better combustion efficiency and, thus, reduce woodfuel consumption have not been widely disseminated and are associated with higher methane emissions than open fires. More than 90% of the households in Africa use open fires. Consumption is presented as per capita for households and as products and quantity of fuel in the small scale industries, commercial, and public sectors. Among the determinants for biofuel consumption are affordability, availability of the fuel, and interfuel substitutions. Flaws in estimating biofuel consumption yield large uncertainties in GHG emissions, with implications for the development of policies on energy planning and environmental protection. However, the application of scenarios can guide policy formulation.     

Modelling and assessing inter-regional trade of CO2 emission reduction units

A cost-efficient way to allocate carbon dioxide (CO₂) emission reductions among countries or regions is to harmonise their marginal reduction costs. This could be achieved by a market of emission reduction units (ERUs). To model such a market, we use a multi-regional MARKAL-MACRO model. It gives insights into the consequences of co-ordinating CO₂ abatement on regional energy systems and economies. As a numerical application, we assess the establishment of a market of ERUs among three European countries for curbing their CO₂ emissions.     

Measuring the Welfare Cost of Climate Change Policies: A Comparative Assessment Based on the Computable General Equilibrium Model GEMINI-E3

Measuring the welfare cost of climate change policies is a real challenge, raising difficult issues of micro- and macro-economics: cost-benefit analysis on the one hand, foreign trade and international specialization on the second hand. At the domestic level the possible existence of distortions, in particular in the fiscal system, may either increase or alleviate the welfare cost of a climate change policy, as illustrated by the debate on double dividend. Effects on the prices in international markets and distorted competition between countries committed to abate (Annex B) and uncommitted countries affect both the sharing of the burden, in particular through the change in the terms of trade, and the allocation of activities with the frequently waved threat of delocalization. Based on a companion theoretical analysis, the present paper aims at putting order in the welfare analysis of climate change policy and to present and compare various estimations, issuing from macro- or computable general equilibrium models. Beside the global welfare cost, the paper focuses on the marginal abatement cost and its relation to the carbon price.Most present conceptual and applied analysis is based on the case of a single domestic household-consumer. Taking into account several consumers raises new challenges, concerning equity but even more fundamentally the mere definition of fiscal distortion, which have not yet been really addressed.     

Human Capital,Innovation, and Climate Policy: an Integrated Assessment

This paper looks at the interplay between human capital and innovation when climate and educational policies are implemented. Following recent empirical studies, human capital and general purpose research and development (R&D) are introduced in an integrated assessment model used to study the dynamics of climate change mitigation. Our results suggest that climate policy stimulates general purpose as well as clean R&D but reduces the incentive to invest in human capital formation. Both innovation and human capital have a scale effect, which increases pollution, as well as a technique effect, which saves emissions for each unit of output produced. While the energy-saving effect prevails when innovation increases, human capital is pollution-using, also because of the gross complementarity between the labor and energy input. When the role of human capital is the key input in the production of general purpose and energy knowledge is accounted for, the crowding-out of education induced by climate policy is mitigated, though not completely offset. By contrast, a policy mix that combines educational as well as climate objectives offsets the human capital crowding-out, at moderate and short-term costs. Over the long run, the policy mix leads to global welfare gains.     

重点区域生活垃圾焚烧行业实施大气污染物超低排放的可行性技术路线研究

随着中国城镇化建设进程的不断加快，生活垃圾焚烧行业迅猛发展。在钢铁、焦化以及燃煤电厂等行业已实施超低排放的情况下，推行生活垃圾焚烧行业超低排放，对进一步改善大气环境具有积极意义。国内一些省份和城市已经或者正在制定生活垃圾焚烧行业地方标准，积极推动行业污染物超低排放。笔者结合各地经验，探讨了4种不同技术方式、不同运行成本的超低排放可行性技术路线，为重点区域垃圾焚烧实施超低排放提供参考和依据。     

Anticipating Climate Threshold Damages

Several integrated assessment studies have concluded that future learning about the uncertainties involved in climate change has a considerable effect on welfare but only a small effect on optimal short-term emissions. In other words, learning is important but anticipation of learning is not. We confirm this result in the integrated assessment model “model of investment and technological development” for learning about climate sensitivity and climate damages. If learning about an irreversible threshold is included, though, we show that anticipation can become crucial both in terms of necessary adjustments of pre-learning emissions and resulting welfare gains. We specify conditions on the time of learning and the threshold characteristic, for which this is the case. They can be summarized as a narrow “anticipation window.”     

Coupling Climate Damages and GHG Abatement Costs in a Linear Programming Framework

The paper discusses the coupling of non-linear non-convex damage costs due to climate change with a cost-efficiency analysis based on a technical-economic linear programming model like MARKAL and studies the implications for the computation of cooperative and non-cooperative solutions. Our empirical analysis of climate damages based on different world emissions levels and paths prove (a) that the dependency of damages on the trajectory of emissions may be neglected, so that the only relevant variables are the cumulative emissions in each country, and (b) that a linear relationship links regional damages and cumulative global emissions. Based on these results, cooperative and non-cooperative equilibria can be much more easily calculated by solving local optimization problems in a case where international trade effects of GHG policies are neglected: given the linearity of damage functions, each country chooses its non-cooperative strategy by considering only the part of its own damage cost due to its own emissions; in the cooperative case, each country takes into account its contribution to the damages done to all countries. Of course, any cost-benefit conclusion that will be produced by this approach is fully dependent on the damage functions. Also, this approach may be extended to the case where trade effects are modeled.     

Assessing disproportionate costs to achieve good ecological status of water bodies in a Mediterranean river basin

Water management is becoming increasingly important as the demand for water grows, diversifies, and includes more complex environmental concerns. The Water Framework Directive (WFD) seeks to achieve a good ecological status for all European Community water bodies by 2015. To achieve this objective, economic consideration of water management must be given to all decision-making processes. Exemption (time or level of stringency) from the objectives of the EU Directive can be justified by proving that the cost of implementing measures is disproportionate to the benefits. This paper addresses the issue of disproportionate costs through a cost-benefit analysis (CBA). To predict the costs, the function costs method is used. The quantification of environmental benefits is more complex, because they are not determined by the market. As an alternative to stated preference methods, we use the distance function approach to estimate the environmental benefits of improving water quality. We then apply this methodological approach to a Mediterranean River Basin in Spain. The results show that the achievement of good status could not be rejected based on the criterion of disproportionate costs in this river basin. This paper illustrates that CBA is a useful tool to inform policy and decision making. Furthermore, it is shown that economics, particularly the valuation of environmental benefits, plays a crucial role in fulfilling the environmental objectives of the WFD.     

Emission Inventory for an Industrial Area of India

The paper presents an emission inventory for Cochin, which is a highly industrialized area situated in the southern part of India. A proper emission inventory is very important for planning pollution control programmes, particularly in coastal sites like Cochin, where environmental situations are of growing concern owing to their typical meterorological conditions. In a systematic way the sources are broadly classified as point, line and area sources. The data on emissions from industries, fuel consumption for vehicular and domestic activities along with the respective emission factors are used for estimating the emissions. The study reveals that industrial sources are mainly responsible for emissions of particulate matter, oxides of sulphur and ammonia in the region. Automobiles are the prime sources of hydrocarbons, oxides of nitrogen and carbon monoxide emitting 95%, 77% and 70% respectively of their total emissions, while the contribution from domestic sources is not very significant.     

Is gender inequality an essential driver in explaining environmental degradation? Some empirical answers from the CO2 emissions in European Union countries

The effect of gender inequality on environmental degradation was examined for panel data of fourteen countries from the European Union (EU) from 1991 to 2016. The Quantile via Moments (QvM) and Fixed effects models were used to perform the empirical investigation. The results from the QvM and the Fixed effects models support that the gender gap pay and energy consumption increase the CO₂ emissions in the EU. However, the economic growth, globalisation and urbanisation deepening do not increase the environmental problem. This empirical investigation will contribute to the literature, policymakers, and governments. It will help develop more initiatives to reduces gender inequality at the same time it mitigates the environmental degradation in the EU countries. Finally, the empirical finds of this investigation will open a new topic of investigation in the literature about the relationship between environmental degradation and gender inequality.